Sponsored by Senator Bob Bacon, Bill 182 passed Senate Monday by a vote of 31-4, which would make Colorado the eighth state to have the benefit corporation legislation. The bill would allow companies to incorporate non-financial interests, such as social benefit and environmental impact, as part of their fiduciary duty along with bottom-line profit for their shareholders.
Benefit corporation law developed out of concern that entrepreneurs have on their social and environmental missions being pushed aside from mere profit-maximization decisions. A company with a benefit corporation class would forbid shareholders from suing over the sacrifice of profits to promote social or environmental benefits.
“Benefit corporations are a wonderful addition to their communities because they use the power of business to address social problems. If companies can focus on being financially successful, creating jobs, and improving their surrounding neighborhoods at the same time it’s a win for everyone,” said Senator Bacon.
New benefit corporations can register with the Secretary of State like any other business. Existing businesses can re-register as a benefit corporation with the Secretary of State following a vote by shareholders.
Update May 21, 2012:
The bill was re-introduced as SB12S-003 in Senate in the 2012 special session, and had been killed.
“This bill’s evolution, unfortunately, carried it beyond the scope of policy and turned it into a political wedge,” said Colorado State Representative Tom Massey. “It’s regrettable to see this bill die, but I remain hopeful this bill will return next year.”